A variety of options

to suit your personal circumstances.

Debt Solutions

Find out which options are available to you and start improving your financial prospects.

If you have found yourself in financial hardship it may seem like there is no way out. The truth is your debts could have arisen from a whole range of reason, some of which you had a choice but some sadly, you did not. The good news is when it comes to finding a solution to help you gain control of your finances again, there are several options available to you.

We have detailed some of those options below, please click on the buttons to read more:

1.

IVA – Individual Voluntary Arrangement
1.

2.

IVA – Self Employed
2.

3.

Debt management plan
3.

4.

Informal Arrangement
4.

5.

Debt relief order
5.

6.

Bankruptcy
6.

1: IVA – Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is a legally binding agreement with your creditors to pay your debts. It is governed by the Insolvency Act 1986 and the associated Rules. You will need to use the services of a Licensed Insolvency Practitioner (IP) to set up an IVA and the IP will monitor and oversee it whilst it remains in force.  You agree to make regular payments to the IVA and these are paid to your creditors by the IP after deducting their fees.

Get an Individual Voluntary Arrangement (IVA)

You will need to use an IP to get started. They will advise you as to the suitability or otherwise of proposing an IVA. ​​

Your IP will go through your financial details with you and prepare a proposal. Once you are happy with the proposal, a meeting with your creditors will be convened. This is a virtual meeting so you do not have to attend. Your IP will propose the IVA to your creditors including an affordable repayment plan and the period of the IVA.  The period is usually five years but is often extended if you are a homeowner.

75% of the voting creditors must vote to approve the proposal before the IVA comes into effect. It is then binding on all of your unsecured creditors. Your creditors can no longer pursue you for the debts, whilst the IVA remains in force.

Get an Individual Voluntary Arrangement (IVA)

Your responsibilities

Your IVA can be voided if you do not keep up your repayments or the other terms of the IVA.  Every year you will be required to provide details of your income and expenditure so that the level of payments can be monitored.

While you have an IVA you still have to pay your normal household bills and certain debts such as Student Loans and court fines.

Public record

Your IVA will be added to the Individual Insolvency Register, which is a public record that will be removed after the IVA ends. Your IVA will stay on your credit record for at least 6 years.

Get an Individual Voluntary Arrangement (IVA)

You will need to use an IP to get started. They will advise you as to the suitability or otherwise of proposing an IVA.

Your IP will go through your financial details with you and prepare a proposal. Once you are happy with the proposal, a meeting with your creditors will be convened. This is a virtual meeting so you do not have to attend. Your IP will propose the IVA to your creditors including an affordable repayment plan and the period of the IVA.  The period is usually five years but is often extended if you are a homeowner.

75% of the voting creditors must vote to approve the proposal before the IVA comes into effect. It is then binding on all of your unsecured creditors. Your creditors can no longer pursue you for the debts, whilst the IVA remains in force.

IVA Self Employed

Your responsibilities

Your IVA can be voided if you do not keep up your repayments or the other terms of the IVA.  Every year you will be required to provide details of your income and expenditure so that the level of payments can be monitored.

While you have an IVA you still have to pay your normal household bills and certain debts such as Student Loans and court fines.

Public record

Your IVA will be added to the Individual Insolvency Register, which is a public record that will be removed after the IVA ends. Your IVA will stay on your credit record for at least 6 years.

Get a Debt Management Plan

Contact an FCA authorised Debt Management Company. The company will work out your monthly payments. You will have to give details about your financial situation, such as your assets, debts, income and creditors.  The company then contacts your creditors and asks them to agree to the plan.

Under a DMP, you will eventually pay your debts in full so a longer time period may be necessary. You can ask your creditors to suspend interest and charges, although your creditors do not have to agree to this.  A DMP is not legally binding so creditors may still pursue you for your outstanding debts despite the plan being in place.

Getting a Debt Management Plan

Costs

Some companies will charge an initial set up fee and a handling fee each time you make a payment. Make sure you understand the costs of your plan and how you pay for it.

Eligibility

DMPs can only be used to pay ‘unsecured’ debts so any mortgage arrears, court fines and student loans will have to be paid outside of the DMP. Normally, any debts due to HMRC (including tax credit overpayments) cannot be paid through a DMP.

As an informal agreement is similar to a debt management plan, this means contacting your creditors directly and negotiating a monthly payment with them.

You will probably need to prepare a list of assets and liabilities, income and expenditure beforehand.

Creditors may not agree to your offer and may require more money each month.

Under an informal arrangement, you will pay your debts in full so a longer time period may be necessary. You can ask your creditors to suspend interest and charges, although your creditors do not have to agree to this.  An informal arrangement is not legally binding so creditors may still pursue you for your outstanding debts despite the plan being in place.

an informal agreement is similar to a debt management plan

Eligibility

Informal arrangements can only be used to pay ‘unsecured’ debts so any mortgage arrears, court fines, student loans and debts due to HMRC (including tax credit overpayments) must be paid outside of the arrangement.

Restrictions

If you successfully apply for a DRO you cannot –

  • borrow more than £500 without telling the lender about your DRO
  • act as a director of a company
  • create, manage or promote a company without the court’s permission
  • manage a business without telling those you do business with about your DRO

If you want to open a bank account, you may also have to tell the bank or building society about your DRO.

The restrictions usually last for 12 months. They can be extended if careless or dishonest behaviour caused your debt problem, for example, if you lied to a lender to obtain credit.

What you need to know

While you have a DRO, you still have to pay your normal household bills and certain debts such as student loans and court fines.

DROs can be cancelled if your finances improve whilst the DRO is in force or if you do not cooperate with the Official Receiver, for example, if you do not give them the information they ask for.

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ArrangementIVA Self EmployedDebt management planInformal ArrangementDebt relief orderBankruptcyDon't know